Knisely v. National Better Living Association, Inc et al

Filing 77

MEMORANDUM OPINION AND ORDER GRANTING IN PART NATIONAL BETTER LIVING ASSOCIATION, INC.'S MOTION TO DIMISS, GRANTING IN PART AMERICAN MEDIAL AND LIFE INSURANCE COMPANY'S MOTION FOR JUDGMENT ON THE PLEADINGS, AND DENYING PLAINTIFF'S MOTI ON TO AMEND the Court GRANTS IN PART NBLAs 21 Motion to Dismiss, GRANTS NBLA leave to brief its Rule 12(b)(2) motion, GRANTS IN PART AMLIs 40 Motion for Judgment on the Pleadings, and DENIES the Plaintiffs Motion to Amend his complaint raised in the event. Signed by District Judge Gina M. Groh on 8/19/2014. (cwm)

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF WEST VIRGINIA
MARTINSBURG

DAVID KNISELY,
Plaintiff,
v.

CIVIL ACTION NO: 3:14-CV-15
(JUDGE GROH)

NATIONAL BETTER LIVING
ASSOCIATION, INC., AMERICAN MEDICAL
AND LIFE INSURANCE COMPANY, and
JOHN/JANE DOES,
Defendants.
MEMORANDUM OPINION AND ORDER GRANTING IN PART NATIONAL BETTER
LIVING ASSOCIATION, INC.’S MOTION TO DISMISS, GRANTING IN PART
AMERICAN MEDICAL AND LIFE INSURANCE COMPANY’S MOTION FOR
JUDGMENT ON THE PLEADINGS, AND DENYING PLAINTIFF’S MOTION TO
AMEND
Currently pending before the Court are Defendant National Better Living Association,
Inc.’s (“NBLA”) Motion to Dismiss brought pursuant to Federal Rules of Civil Procedure
12(b)(2) and 12(b)(6) [Doc. 21], Defendant American Medical and Life Insurance
Company’s (“AMLI”) Motion for Judgment on the Pleadings [Doc. 40], and the Plaintiff’s
Motion to Amend his complaint raised in the event the Court dismisses any portion of his
complaint. Having considered these motions and the parties’ arguments, the Court
GRANTS IN PART NBLA’s Motion to Dismiss, GRANTS NBLA leave to brief its Rule
12(b)(2) motion, GRANTS IN PART AMLI’s Motion for Judgment on the Pleadings, and
DENIES the Plaintiff’s Motion to Amend.

I. BACKGROUND
1. Factual Allegations1
NBLA is a national membership association that provides group benefits. Compl.
¶ 5. AMLI is an insurer that issued a group health insurance policy for NBLA’s members.
Id. ¶¶ 6, 11. The policy provides limited medical benefits. Id. ¶ 13. NBLA and/or AMLI
contracted with John Doe 1 to market and sell AMLI’s health insurance policy to NBLA’s
members. Id. ¶ 7. With NBLA and AMLI’s knowledge, John Doe 1 represented that the
policy offered comprehensive medical coverage when it did not. Id. ¶ 13. For example, the
policy excluded pre-existing conditions, but was advertised as covering them. Id. ¶¶ 13,
41, 44-45.
NBLA, AMLI, and John Doe 1 allegedly interacted as follows. NBLA advertised that
it offered reasonable quotes on comprehensive health insurance policies. Id. ¶ 15. When
a potential customer called NBLA, she was connected with John Doe 1's call center
representatives. Id. John Doe 1's agent would make statements representing the AMLI
policy provided comprehensive medical coverage. Id. A caller who chose to purchase the
policy would provide her personal information to the representative. Id. The call would
then be transferred to an AMLI agent who recited “confusing and incomprehensible
disclaimers.” Id.
NBLA, AMLI, and John Doe 1 denied, delayed, and underpaid claims brought under
the AMLI policy. Id. ¶ 22. They did so by disguising who was responsible for responding
to claims, routinely denying claims, misapplying the pre-existing limitation, misusing billing
1

This section assumes the facts alleged in the complaint are true and construes
those facts in the light most favorable to the Plaintiff.
2

and diagnosis coding information to misclassify claims as excluded or subject to payment
limitations, delaying responses to claims, denying that plan members were members, and
stating that timely claims were late. Id. These actions have led to “hundreds of consumer
complaints” and civil and administrative actions in Alaska, Arkansas, Florida, Georgia,
Kentucky, Maine, Maryland, Montana, New York, Wisconsin, and Utah. Id. ¶¶ 23-36.
In 2011, Plaintiff David Knisely purchased the AMLI policy through NBLA. Id.
¶ 47. He moved to Harpers Ferry, West Virginia and lived there with his brother and Don
Mock, a family friend. Id. ¶¶ 38-39. Having lost his job, the Plaintiff maintained health
insurance from a former employer through COBRA, but the premiums were high. Id. ¶ 40.
As such, he began searching for a new health insurance policy that would cover his preexisting conditions. Id. ¶ 41.
In early 2011, the Plaintiff contacted Jane Doe 2 (an employee or agent of NBLA or
John Doe 1) to inquire about insurance coverage. Id. ¶¶ 42-43. She attempted to sell the
Plaintiff AMLI’s group health insurance plan. Id. The Plaintiff discussed his pre-existing
medical conditions with Jane Doe 2. Id. ¶ 44. She told the Plaintiff that the plan covered
pre-existing conditions, doctor visits, medications, outpatient procedures, and lab work. Id.
¶ 45. Jane Doe 2 also stated that the Plaintiff could cancel the plan within thirty days of
enrolling for any reason. Id. ¶ 46. The Plaintiff decided to enroll in NBLA’s group plan. Id.
¶ 47. Mr. Mock granted the Plaintiff permission to use his bank card to pay the plan’s
activation fee. Id. ¶ 48. The Plaintiff told Jane Doe 2 to use Mr. Mock’s account only for
the activation fee and to bill him for subsequent payments. Id. ¶ 49. Jane Doe 2 agreed
to this arrangement. Id.
Thereafter, the Plaintiff received the policy’s plan materials in the mail. Id. ¶ 50. The
3

Plaintiff discovered through these materials that Jane Doe 2's statements about the plan
were false. Id. For example, the plan did not cover his medications. Id. In May 2011,
within the cancellation period, the Plaintiff called NBLA and spoke with John Doe 3. Id.
¶¶ 51, 59. He told John Doe 3 that he was canceling his coverage. Id. John Doe 3 stated
that the Plaintiff’s coverage was canceled, effective immediately. Id.
¶ 52. Neither NBLA nor AMLI communicated with the Plaintiff after that point. Id. ¶ 53.
On approximately February 23, 2012, the Plaintiff was hospitalized for an allergic
reaction to medication he took for a chronic medical condition. Id. ¶ 55. He then
contracted MRSA in the hospital. Id. He was discharged on April 11, 2012. Id. This
hospital stay resulted in medical bills exceeding $60,000. Id. ¶ 56.
In late 2012, Mr. Mock told the Plaintiff he had discovered that, over an eighteenmonth period, NBLA had withdrawn thousands of dollars from his bank account. Id.
¶ 57. The Plaintiff contacted NBLA and spoke with an individual who identified herself as
Ms. Smith. Id. ¶ 58. The Plaintiff told Ms. Smith that he had canceled his policy and had
not authorized additional deductions from Mr. Mock’s bank account. Id. ¶ 59. Ms. Smith
stated that his membership had not been canceled. Id. ¶ 60. The Plaintiff demanded that
NBLA either refund the money deducted from Mr. Mock’s account or pay his medical bills.
Id. ¶ 61. Ms. Smith denied the Plaintiff’s claim on the basis that he did not timely submit
it and did not report it to the proper entity, AMLI. Id. ¶ 62. In December 2012, after the
Plaintiff’s conversation with Ms. Smith, NBLA sent the Plaintiff insurance cards. Id. ¶ 63.
The Plaintiff canceled his NBLA membership in January 2013. Id. ¶ 64.
In May 2013, the Plaintiff’s counsel contacted Ms. Smith concerning the NBLA
membership. Id. ¶ 65. NBLA’s counsel wrote to the Plaintiff’s counsel on May 14, 2013.
4

Id. ¶ 66. His letter stated, among other things, that NBLA did “not have a record of a
medical claim being filed with AMLI.” Compl. Ex. O; id. On May 28, 2013, the Plaintiff’s
counsel sent a letter to NBLA’s counsel, disputing NBLA’s counsel’s representations of their
conversation and requesting information about NBLA and AMLI. Compl. ¶ 67; Compl. Ex.
P. Meanwhile, on May 23, 2013, the Plaintiff’s counsel contacted AMLI to discuss the
Plaintiff’s claim. Compl. ¶ 68; Compl. Ex. Q. AMLI stated it could not do so without a
HIPAA authorization from the Plaintiff. Compl. ¶ 68. The Plaintiff provided AMLI with this
authorization. Id. ¶ 69. His counsel then gave AMLI bills and records from the Plaintiff’s
hospitalization and requested that AMLI reimburse the Plaintiff for all charges. Id. AMLI
never contacted the Plaintiff regarding his claim. Id.
2. Procedural History
Based on the foregoing allegations, on December 12, 2013, the Plaintiff initiated this
case against NBLA, AMLI, and John/Jane Does in West Virginia state court. His complaint
raises the following claims: (1) violations of the Racketeer Influenced and Corrupt
Organizations Act (“RICO Act”) under 18 U.S.C. § 1962(c) and (d) against all Defendants;
(2) violations of the West Virginia Unfair Trade Practices Act (“WVUTPA”) under West
Virginia Code § 33-11-4 against all Defendants; (3) violations of the Discount Medical Plan
Organizations and Discount Prescription Drug Plan Act Organization Act under West
Virginia Code § 33-15E-1 against NBLA; (4) bad faith and breach of contract against AMLI;
(5) fraud against all Defendants; and (6) unconscionability against all Defendants.
On January 29, 2014, NBLA removed this case to this Court with AMLI’s consent.
AMLI answered the complaint on February 3, 2014. On February 21, 2014, NBLA moved
to dismiss the complaint for lack of personal jurisdiction under Rule 12(b)(2) and for failure
5

to state a claim upon which relief can be granted under Rule 12(b)(6). NBLA then moved
the Court to stay this case pending resolution of its Motion to Dismiss. The Court denied
this motion. On April 11, 2014, AMLI filed a Motion for Judgment on the Pleadings.
Further, in his responses to the Defendants’ motions, the Plaintiff states that, if the Court
is inclined to dismiss any part of his complaint, he would request leave to amend it.
II. STANDARD OF REVIEW
When considering a motion for judgment on the pleadings, a court applies the same
standard that it does for a Rule 12(b)(6) motion to dismiss. See Burbach Broad. Co. of Del.
v. Elkins Radio Corp., 278 F.3d 401, 405-06 (4th Cir. 2002). A complaint must contain “a
short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.
R. Civ. P. 8(a)(2). Rule 12(b)(6) allows a defendant to challenge the complaint’s sufficiency
in this regard by moving to dismiss a complaint for failing “to state a claim upon which relief
can be granted.” To survive a Rule 12(b)(6) motion, the complaint must allege “enough
facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Although Rule
8's pleading standard “does not require ‘detailed factual allegations,’ . . . it demands more
than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at
678 (citing Twombly, 550 U.S. at 555).

Thus, “[a] pleading that offers ‘labels and

conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’ Nor
does a complaint suffice if it tenders ‘naked assertions’ devoid of ‘further factual
enhancements.’” Id. (quoting Twombly, 550 U.S. at 555, 557).
When reviewing a Rule 12(b)(6) motion, a court must assume that the complaint’s
well-pleaded allegations are true, resolve all doubts and inferences in favor of the plaintiff,
6

and view the allegations in a light most favorable to the plaintiff. Edwards v. City of
Goldsboro, 178 F.3d 231, 243-44 (4th Cir. 1999). Only factual allegations are entitled to
the presumption of truth. See Iqbal, 556 U.S. at 678-79. A court may also consider facts
derived from sources beyond the four corners of the complaint, including documents
attached to the complaint, documents attached to the motion to dismiss “so long as they
are integral to the complaint and authentic,” and facts subject to judicial notice under
Federal Rule of Evidence 201. Philips v. Pitt Cnty. Mem’l Hosp., 572 F.3d 176, 180 (4th
Cir. 2009).
III. ANALYSIS
1. RICO Act Claims
Under the RICO Act, if a violation of 18 U.S.C. § 1962 injures a person’s “business
or property,” he may bring a private civil action to recover treble damages. 18 U.S.C.
§ 1964(c). The Plaintiff claims the Defendants violated two provisions of the RICO Act–
§ 1962(c) and (d). The Defendants seek dismissal of these claims.
a. Section 1962(c) Claim
Section 1962(c) of the RICO Act makes it “unlawful for any person employed by or
associated with any enterprise engaged in, or the activities of which affect, interstate or
foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such
enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.”
18 U.S.C. § 1962(c). To establish a violation of § 1962(c), the Plaintiff must demonstrate:
“(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.” Sedima,
S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985).

7

The Defendants argue that the § 1962(c) fails to allege: (1) the predicate acts of
racketeering with particularity; (2) an injury and, alternatively, proximate cause needed to
have standing; and (3) an “enterprise.” The Court only reaches the first and second
arguments because either basis is dispositive.
i. Predicate Acts
The Plaintiff must allege sufficient predicate acts of racketeering activity. Id. In this
case, the Plaintiff alleges that the Defendants committed mail fraud, wire fraud, and bank
fraud. “[R]acketeering activity” is any act indictable under certain provisions of the federal
criminal code, including 18 U.S.C. § 1341 (mail fraud), 18 U.S.C. § 1343 (wire fraud), and
18 U.S.C. § 1344 (bank fraud). 18 U.S.C. § 1961(1). The Defendants argue that the
Plaintiff has not adequately pleaded the predicate acts.
When a plaintiff alleges fraud, he “must state with particularity the circumstances
constituting fraud.” Fed. R. Civ. P. 9(b). Rule 9(b) applies to the pleading of mail, wire, and
bank fraud as predicate acts in civil RICO claims. See Proctor v. Metro. Money Store
Corp., 645 F. Supp. 2d 464, 473 (D. Md. 2009). The Fourth Circuit has stated that “the
circumstances required to be pled with particularity under Rule 9(b) are the time, place, and
contents of the false representations, as well as the identity of the person making the
misrepresentation and what he obtained thereby.” Harrison v. Westinghouse Savannah
River Co., 176 F.3d 776, 785 (4th Cir. 1999) (citation and quotation marks omitted). When
multiple defendants are asked to respond to allegations of fraud, “the complaint should
inform each defendant of the nature of his alleged participation in the fraud.” Bluestone
Coal Corp. v. CNX Land Res., Inc., Civil Action No. 1:07-00549, 2007 WL 6641647, at *6

8

(S.D.W. Va. Nov. 16, 2007) (citing DiVittorio v. Equidyne Extractive Indus., Inc., 822 F.3d
1242, 1247 (2d Cir. 1987)); see also Juntti v. Prudential-Bache Secs., Inc., 993 F.2d 228,
1993 WL 138523, at *2 (4th Cir. 1993) (affirming dismissal of complaint because complaint
referenced “defendants” generally, not action of specific defendants regarding alleged
fraud). A court “should hesitate to dismiss a complaint under Rule 9(b) if the court is
satisfied (1) that the defendant has been made aware of the particular circumstances for
which she will have to prepare a defense at trial, and (2) that plaintiff has substantial
prediscovery evidence of those facts.” Harrison, 176 F.3d at 784.
Because mail and wire fraud have similar elements, the Court will consider bank
fraud and then address those predicate acts together. Proctor, 645 F. Supp. 2d at 473.
a) Bank Fraud
The Plaintiff cannot rely on bank fraud as a predicate act. 18 U.S.C. § 1344
prohibits the knowing execution of “a scheme or artifice (1) to defraud a financial institution;
or (2) to obtain any of the moneys, funds, credits, assets, securities, or other property
owned by, or under the custody or control of, a financial institution, by means of false or
fraudulent pretenses, representations, or promises.” (emphasis added). The statute’s plain
terms require that a financial institution was the victim of fraud. Hilgeford v. Nat'l Union Fire
Ins. Co. of Pittsburgh, Civil Action No. 3:08-CV-669, 2009 WL 302161, at *6 (E.D. Va. Feb.
6, 2009). That is not true here. The Plaintiff alleges only fraud committed against a
person, Mr. Mock. Accordingly, because the complaint does not allege that Defendants
defrauded “a financial institution,” bank fraud cannot be a predicate act. See id. (holding
bank fraud could not be a predicate act because plaintiff was not a financial institution); see
also Holmes v. MBNA Am. Bank, N.A., Civil Action No. 5:05-CV-16, 2007 WL 952017, at
9

*1 (W.D.N.C. Mar. 27, 2007) (same).
b) Mail and Wire Fraud
To prove mail or wire fraud, the Plaintiff must establish “(1) a scheme disclosing an
intent to defraud; and (2) the use, respectively, of the mails or interstate wires in
furtherance of the scheme.” Am. Chiropractic Ass’n v. Trigon Healthcare, Inc., 367 F.3d
212, 233 (4th Cir. 2004) (citing Chisolm v. TranSouth Fin. Corp., 95 F.3d 331, 336 (4th Cir.
1996)). A “‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another
of the intangible right of honest services.” 18 U.S.C. § 1346. Further, to state a mail or
wire fraud claim, “a plaintiff must allege ‘specific intent to defraud.’” Bourgeois v. Live
Nation Entm’t, Inc., __ F. Supp. 2d __, 2014 WL 936841, at *35 (D. Md. Mar. 10, 2014)
(quoting United States v. Wynn, 684 F.3d 473, 478 (4th Cir. 2012)).
In this case, the complaint alleges that the Defendants used the United States mail
and wires to misrepresent the health insurance policy as providing medical coverage that
it did not actually provide. It supports this claims with several factual allegations, including:
(1) the Plaintiff’s conversation, “[s]ometime in early 2011,” with Jane Doe 2 about insurance
coverage that led to him purchase the AMLI policy through NBLA; (2) the Plaintiff’s receipt
of the plan materials after enrolling, realization that the plan did not offer the coverage as
represented by Jane Doe 2, and cancellation of the policy in May 2011; and (3) the
Plaintiff’s conversation with Ms. Smith in 2012 wherein Ms. Smith represented that the
policy covered him when he was hospitalized and denied his claim for coverage as untimely
and improperly reported.
These allegations, even taken in light of the whole complaint, do not survive the
scrutiny required by Rule 9(b). To the Plaintiff’s credit, he sufficiently describes the false
10

representations made concerning the policy as offering comprehensive coverage when it
did not actually do so (e.g., it did not cover his medications). The complaint does not,
however, sufficiently allege the timing of the misrepresentations made about the policy to
give the Defendants adequate notice of his claim. See Harrison, 176 F.3d at 784-85.
Rather, it only provides a broad time frame concerning these events–that the Plaintiff’s
interactions with the scheme began “[s]ometime in early 2011" when he purchased the
policy, Compl . ¶ 42, that he canceled the policy in May 2011, and that he spoke with Ms.
Smith in 2012. Thus, though a key component of the Plaintiff’s case, there is not one
specific date concerning the alleged misrepresentations made about the nature of the
policy. In addition to the lack of particularity concerning timing, the complaint does not
allege how and why any denial of the Plaintiff’s claim for hospital expenses involved a
misrepresentation. It does not, for example, state why the policy should cover those
expenses; indeed, there are no details concerning the nature of the claim beyond the
allegation that it concerns a hospitalization for an allergic reaction and MRSA. See
Hilgeford, 2009 WL 302161, at *6 (finding mail fraud not a basis for RICO claim where
plaintiff did not state a cognizable misrepresentation concerning the denial of the insurance
claim at issue). Accordingly, because the Plaintiff has not sufficiently alleged the timing of
the false representations and the contents of any misrepresentation made concerning a
denial of coverage, the Plaintiff’s mail and wire fraud allegations do not pass muster under
Rule 9(b). Compare Williams v. Equity Holding Corp., 498 F. Supp. 2d 831, 836-37, 842
& n.10 (E.D. Va. 2007) (finding, in “a close call,” mail and wire fraud pled with particularity
where plaintiffs gave a broad time line of events that included specific dates for several
communications involved in the alleged fraud). Dismissal therefore is necessary because
11

the Plaintiff has not plausibly stated a predicate offense to sustain a § 1962(c) claim.
ii. Injury and Proximate Cause
Even if the Plaintiff had sufficiently pleaded the predicate acts, he does not have
standing to bring a § 1962(c) claim. The Plaintiff contends that he suffered two injuries: (1)
the unauthorized withdrawals from Mr. Mock’s account; and (2) the cost of his
hospitalization. The Defendants argue that these are not injuries because, respectively,
the unauthorized deductions only injured Mr. Mock and the Plaintiff had no expectation of
coverage after canceling his policy before his hospitalization. They alternatively argue that
the Plaintiff has not demonstrated proximate cause.
To have standing to sue under the RICO Act, the violation of § 1962 must have
injured the Plaintiff “in his business or property.” 18 U.S.C. § 1964(c). That is, his
complaint must plausibly allege that his business or property was injured and that the RICO
violation caused that injury. Bailey v. Atl. Auto. Corp., __ F. Supp. 2d __, 2014 WL 204262,
at *14 (D. Md. 2014).
The Fourth Circuit Court of Appeals has elaborated on the injury requirement,
explaining that, “[i]f a party specifically bargains for a service, is told that the service has
been performed, is charged for the service, and does not in fact receive the service,” courts
should not “inquire into whether the service ‘really’ had value as a precondition to finding
that injury to business or property has occurred.” Potomac Elec. Power Co. v. Elec. Motor
& Supply, Inc., 262 F.3d 260, 265 (4th Cir. 2001) (citation omitted). As for causation, “[t]he
RICO predicate acts must not only be a ‘but for’ cause of a plaintiff’s injury, but the
proximate cause of that injury as well.” Walters v. McMahen, 684 F.3d 435, 444 (4th Cir.
2012) (citing Hemi Grp., LLC v. City of New York, 559 U.S. 1, 9 (2010)). Proximate cause
12

requires “some direct relation between the injury asserted and the injurious conduct
alleged.” Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 268 (1992). In other words,
the Plaintiff’s injuries “must ‘flow from the commission of the predicate acts.’” Walters, 684
F.3d at 440 (quoting Sedima S.P.R.L., 473 U.S. at 497). However, the “Holmes Court
cautioned against an overly expansive view of proximate cause: ‘[A] plaintiff who
complained of harm flowing merely from the misfortunes visited upon a third person by the
defendant’s acts [is] generally said to stand at too remote a distance to recover.’” Mid Atl.
Telecom, Inc. v. Long Distance Servs., Inc., 18 F.3d 260, 262 (4th Cir. 1994) (quoting
Holmes, 503 U.S. at 268).
Here, first, any unauthorized deductions from Mr. Mock’s bank account did not injure
the Plaintiff. The complaint alleges that Mr. Mock allowed the Plaintiff to use his bank
account to pay the policy’s activation fee. There are no allegations that the Plaintiff must
repay Mr. Mock for the withdrawals. Because it was Mr. Mock’s funds that were taken and
the Plaintiff has not alleged he must reimburse Mr. Mock, it cannot be said that the
withdrawals injured the Plaintiff. Therefore, the Plaintiff lacks standing to sue under the
RICO Act based on an injury suffered by a third party. See Firestone v. Galbreath, 976
F.2d 279, 285 (6th Cir. 1992) (holding beneficiaries of an estate lacked standing to bring
civil RICO claim because “[t]he estate suffered the direct harm; it, not the Family Trust, lost
the property”).
The expenses that the Plaintiff incurred due to the Defendants’ alleged denial of his
claim, however, injured the Plaintiff’s property interest in the policy. Finding that such
expenses are an injury to property is consistent with the reasoning of Potomac Electric
Power Co.–i.e., the Plaintiff had an insurance policy and did not get the benefits of that
13

policy. 262 F.3d at 265. The Defendants do not argue otherwise. Rather, without citing
any authority, they insist that these expenses did not injure the Plaintiff because the Plaintiff
claims that he canceled his policy before his hospitalization. This argument goes more to
proximate cause issues that the Court will address next. Moreover, it overlooks that the
Plaintiff is basing his RICO Act claims on inconsistent theories of recovery–that the
withdrawals from Mr. Mock’s account injured him because he canceled his policy in 2011;
or that, because his policy was not canceled, the Defendants’ refusal to pay his medical
bills injured his property interest in the policy’s benefits. The Plaintiff can take this
approach to pleading his claims. See Fed. R. Civ. P. 8(d)(3) (stating a plaintiff “may state
as many separate claims . . . as [he] has, regardless of consistency”). Therefore, although
this injury is inconsistent with some of the complaint’s allegations, the Plaintiff can still rely
on it to bring a § 1962(c) claim.
However, the Plaintiff has not alleged facts establishing that the alleged mail and
wire fraud proximately caused his injury.2 The denial of coverage injury centers on the
nature of the policy and the claim made. There are no facts showing that the alleged denial
of coverage was fraudulent.

The complaint does not state the details of the claim

submitted for coverage under the policy, the provisions of the policy that entitle him to such
coverage, or that the Defendants made any misrepresentations about the policy when
handling his claim. Without such information, it is impossible to discern whether the
Defendants engaged in any fraudulent scheme to deny the Plaintiff coverage–let alone that
there is a relationship between the Plaintiff’s alleged entitlement to policy benefits and any

2

As noted earlier, bank fraud cannot be a predicate act because none of the
alleged fraud was committed upon a financial institution.
14

of the predicate acts. Accordingly, the Court also must dismiss the § 1962(c) claim for lack
of standing. See Holmes, 503 U.S. at 268.
b. Section 1962(d) Claim
The Defendants also argue that the Court should dismiss the RICO conspiracy claim
brought under § 1962(d). Because the complaint does not state a § 1962(c) RICO claim,
the Court must dismiss this claim. GE Inv. Private Placement Partners II v. Parker, 247
F.3d 543, 551 n.2 (4th Cir. 2001).
2. NBLA’s Motion to Dismiss for Lack of Personal Jurisdiction
A defendant challenges personal jurisdiction through a Rule 12(b)(2) motion. In the
Fourth Circuit, however, “service of process on a RICO defendant in a judicial district where
that defendant resides establishes personal jurisdiction, provided that the assertion of
jurisdiction comports with due process.” Swarey v. Desert Capital REIT, Inc., Civil Action
No. DKC 11-3615, 2012 WL 4208057, at *7 (D. Md. Sept. 20, 2012) (citing ESAB Grp., Inc.
v. Centricut, Inc., 126 F.3d 617, 626 (4th Cir. 1997)). NBLA acknowledges that this
principle renders it subject to personal jurisdiction given the RICO claims, but requests
leave to challenge personal jurisdiction if the Court dismisses the RICO claims. Now that
the Court has done so, the question arises whether the Court has personal jurisdiction over
NBLA absent the RICO claims. See D’Addario v. Geller, 264 F. Supp. 2d 367, 387-88
(E.D. Va. 2003) (stating that, if the court dismissed the RICO claim that provided pendent
personal jurisdiction, “the state claims against that defendant would also have to be
dismissed, unless another basis for asserting personal jurisdiction exists”); see also Taylor
v. Bettis, 976 F. Supp. 2d 721, 751 (E.D.N.C. 2013). Accordingly, to determine whether

15

there is a basis for personal jurisdiction over NBLA absent the RICO claims, the Court will
grant leave to brief this issue and deny the remainder of NBLA’s motion to dismiss with
leave to refile pending the outcome of the Rule 12(b)(2) motion.
3. AMLI’s Motion for Judgment on the Pleadings
The Court will now consider the remainder of AMLI’s Motion for Judgment on the
Pleadings.
a. WVUTPA Violations
The WVUTPA prohibits a person from engaging “in any trade practice which is
defined in this article as . . . an unfair method of competition or an unfair or deceptive act
or practice in the business of insurance.”

W. Va. Code. § 33-11-3. West Virginia

recognizes an implied private cause of action for violations of the WVUTPA brought
pursuant to § 33-11-4(9). Syl. Pt. 2, Jenkins v. J.C. Penney Cas. Ins. Co., 280 S.E.2d 252,
253 (W. Va. 1981), overruled on other grounds, State ex rel. State Farm Fire & Cas. Co.
v. Madden, 451 S.E.2d 721 (W. Va. 1994). The Plaintiff alleges the following WVUTPA
violations:
1.

West Virginia Code § 33-11-4(1)(a) and (e) “by misrepresenting
pertinent facts and policy provisions.” Compl. ¶ 87.

2.

West Virginia Code § 33-11-4(2) by falsely advertising the policy and
disseminating false information about the policy. Compl. ¶ 88.

3.

West Virginia Code § 33-11-4(9)(a) “by misrepresenting pertinent
facts and insurance policy provisions relating to the Plaintiff’s
insurance coverage.” Compl. ¶ 89.

4.

West Virginia Code § 33-11-4(9)(b) “by failing to acknowledge and act
reasonably promptly upon communication with respect to claims
arising under insurance policies.” Compl. ¶ 90.

5.

West Virginia Code § 33-11-4(9)(b) “by failing to adopt and implement
16

reasonable standards for the prompt investigation of claims arising
under insurance policies.” Compl. ¶ 91.
6.

West Virginia Code § 33-11-4(9)(d) “by refusing to pay claims without
conducting a reasonable investigation based upon all available
information.” Compl. ¶ 92.

7.

West Virginia Code of State Rules § 114-14-4 “[b]y failing to disclose
and by concealing provisions of the ‘benefit plan’ along with multiple
coercive statements as time limits for notification of claims.” Compl.
¶ 93.

AMLI argues that the Plaintiff’s WVUTPA claims fail because: (1) the statute of
limitations bars them; (2) the complaint does not plead a cognizable injury; and (3) the
complaint does not plead a general business practice as § 33-11-4(9) requires.
i. Statute of Limitations
The Court applies the West Virginia statute of limitations and West Virginia law
construing it. Wade v. Danek Med., Inc., 182 F.3d 281, 289 (4th Cir. 1999) (holding that
district courts should apply the state statute of limitations and any rule constituting “an
integral part” of it). In Dunn v. Rockwell, 689 S.E.2d 255 (W. Va. 2009), the Supreme Court
of Appeals of West Virginia explained that courts should conduct a five-step analysis to
determine whether the statute of limitations bars a cause of action.
First, the Court must “identify the applicable statute of limitation.” Id. at 265. Here,
WVUTPA claims have a one-year statute of limitations. Syl. Pt. 1, Wilt v. State Auto. Mut.
Ins. Co., 506 S.E.2d 608, 608 (W. Va. 1998).
Second, the Court “should identify when the requisite elements of the cause of
action occurred.” Dunn, 689 S.E.2d at 265. Third, the Court must determine whether the
discovery rule should apply using the criteria set forth in Syllabus Point 4 of Gaither v. City

17

Hosp., Inc., 487 S.E.2d 901 (W. Va. 1997). Id. Syllabus Point 4 of Gaither provides:
In tort actions . . . under the discovery rule the statute of limitations begins to
run when the plaintiff knows, or by the exercise of reasonable diligence,
should know (1) that the plaintiff has been injured, (2) the identity of the entity
who owed the plaintiff a duty to act with due care, and who may have
engaged in conduct that breached that duty, and (3) that the conduct of that
entity has a causal relation to the injury.
“[W]hether a plaintiff ‘knows of’ or ‘discovered’ a cause of action is an objective test. The
plaintiff is charged with knowledge of the factual, rather than the legal, basis for the action.
This objective test focuses upon whether a reasonable prudent person would have known,
or by the exercise of reasonable diligence should have known, of the elements of a
possible cause of action.” Syl. Pt. 4, Dunn, 689 S.E.2d at 258. Further, “[w]here a plaintiff
knows of his injury, and the facts surrounding that injury place him on notice of the possible
breach of a duty of care, that plaintiff has an affirmative duty to further and fully investigate
the facts surrounding that potential breach.” McCoy v. Miller, 578 S.E.2d 355, 359 (W. Va.
2003). Fourth, if the court finds that “the plaintiff is not entitled to the benefit of the
discovery rule,” it then “determine[s] whether the defendant fraudulently concealed facts
that prevented the plaintiff from discovering or pursuing the cause of action.” Dunn, 689
S.E.2d at 265. Fifth, the court determines whether “some other tolling doctrine” arrests the
statute of limitation period. Id.
Because the WVUPTA claims arise from different factual allegations–the
representations made about the policy and the handling of the Plaintiff’s claim–the Court
will address the application of the statute of limitations to each set of facts in turn.
a) Policy Representations
West Virginia Code § 33-11-4 pertinently provides:
18

(1) Misrepresentation and false advertising of insurance policies. – No person
shall make, issue, circulate, or cause to be made, issued or circulated, any
estimate, circular, statement, sales presentation, omission or comparison
which:
(a) Misrepresents the benefits, advantages, conditions or terms of any
insurance policy; or
...
(e) Uses any name or title of any insurance policy or class of insurance
policies misrepresenting the true nature thereof;
...
(2) False information and advertising generally. – No person shall make,
publish, disseminate, circulate or place before the public, or cause, directly
or indirectly, to be made, published, disseminated, circulated or placed
before the public, in a newspaper, magazine or other publication, or in the
form of a notice, circular, pamphlet, letter or poster or over any radio or
television station, or in any other way, an advertisement, announcement or
statement containing any assertion, representation or statement with respect
to the business of insurance or with respect to any person in the conduct of
his or her insurance business, which is untrue, deceptive or misleading.
W. Va. Code. § 33-11-4(1)(a), (1)(e), (2). Because § 33-11-4(1)(a), (1)(e), and (2) all
prohibit misrepresentations made about the nature of an insurance policy, the Court will
apply the Dunn factors to these claims based on the allegations concerning the
representations that the Defendants made about the policy.
First, the requisite elements of these claims occurred in 2011. See Dunn, 689
S.E.2d at 265. The Plaintiff contacted Jane Doe 2 in early 2011. Jane Doe 2 allegedly
misrepresented the AMLI policy offered as offering comprehensive health care coverage.
The Plaintiff then received plan materials in the mail. He discovered through those
materials that Jane Doe 2's statements were false. In May 2011, after receiving the
materials, the Plaintiff called NBLA to cancel his policy.
19

Applying the discovery rule, the Plaintiff knew or should have known of the alleged
§ 33-11-4(1)(a), (1)(e), and (2) violations no later than when he reviewed the plan
materials.

As for § 33-11-4(1)(a), the Plaintiff admits that he realized Jane Doe 2

misrepresented the benefits of AMLI’s policy when he read the plan materials. At that
same time, based on the plan materials, he knew or should have known that the policy’s
name or title did not reflect the true nature of the policy (i.e., the limited benefits offered),
the basis of a § 33-11-4(1)(e) violation. Last, considering § 33-11-4(2), the Plaintiff knew
or should have known that any advertisements about the policy were “untrue, deceptive or
misleading” when he discovered through the plan materials that the policy’s benefits did not
conform with what had been represented about the policy.3
The Plaintiff urges that the statute of limitations began to run in May 2013 when he
submitted a claim to AMLI through counsel. This argument fails to recognize that he bases
these violations on events distinct from those related to AMLI’s handling of his claim. There
are no allegations that any misrepresentations about the policy’s nature occurred when
AMLI handled the claim. Thus, at the latest, the statute of limitations began to run as to the
§ 33-11-4(1)(a), (1)(e), and (2) claims in 2011.
The Court must now consider whether AMLI “fraudulently concealed facts that
prevented the plaintiff from discovering or pursuing the cause of action.” Dunn, 689 S.E.2d
at 265. The Plaintiff has not argued that AMLI did so in his responses or complaint. Thus,
fraudulent concealment does not apply.
Last, the Court must determine whether “some other tolling doctrine” applies. Id.
3

Though the Court analyzes this claim for timeliness, the Court notes that the
complaint is devoid of any allegations concerning when, if at all, the Plaintiff saw an
advertisement that would trigger § 33-11-4(2).
20

The Plaintiff has not referenced another tolling doctrine in his complaint or response to
AMLI’s motion. Thus, this step does not apply.
In light of the Dunn analysis, the one-year statute of limitations bars the Plaintiff’s
WVUTPA claims brought under § 33-11-4(1)(a), (1)(e) and (2). See Syl. Pt. 1, Wilt, 506
S.E.2d at 608. Giving the Plaintiff the benefit of the discovery rule, the statute of limitations
began to run sometime in 2011. The Plaintiff filed this case on December 12, 2013–more
than one year after 2011. Accordingly, the Court grants AMLI’s motion for judgment on
these claims because they are untimely.4
b) Claim Handling
The Court now turns to the WVUPTA claims based on § 33-11-4(9)(a), (b), and (d)
and Rule § 114-14-4 because they all relate to AMLI’s handling of the Plaintiff’s claim. The
Defendant argues that these claims are untimely because the statute of limitations began
to run in 2011 when the Plaintiff canceled the policy. Like before, the Plaintiff counters that
the statute of limitations began to run in May 2013 when his counsel submitted his claim
to AMLI.
West Virginia Code § 33-11-4(9) pertinently provides:
(9) Unfair claim settlement practices. – No person shall commit or perform
with such frequency as to indicate a general business practice any of the
following:
(a) Misrepresenting pertinent facts or insurance policy provisions relating to
coverages at issue;
(b) Failing to acknowledge and act reasonably promptly upon
communications with respect to claims arising under insurance policies;
4

Although these claims are untimely, it is questionable whether West Virginia
recognizes them because Jenkins held only that § 33-11-4(9) claims are cognizable.
21

...
(d) Refusing to pay claims without conducting a reasonable investigation
based upon all available information[.]
Rule § 114-14-4 provides:
4.1. Failure to disclose pertinent policy provisions.
No person may knowingly fail to fully disclose to first-party claimants all
pertinent benefits, coverages or other provisions of an insurance policy or
insurance contract under which a claim is presented.
4.2. Concealment of pertinent policy provisions.
No person may knowingly conceal from first-party claimants benefits,
coverages or other provisions of any insurance policy or insurance contract
when such benefits, coverages or other provisions are pertinent to a claim.
4.3. Coercive statements.
No person may make statements which indicate that the rights of a claimant
may be impaired if a form or release is not completed within a given period
of time unless the statement is given for the purpose of notifying the claimant
of the provisions of a statute of limitation or of a policy or contract time limit.
4.4. Time limit for notification of claim.
Except where a time limit is specified by statute or legislative rule, no insurer
may require a first-party claimant to give notification of a claim or proof of
claim within a specified time.
4.5. Releases.
a. No person may ask a first-party claimant to sign a release that extends
beyond the subject matter which gave rise to the claim payment.
b. No insurer may issue any check or draft, in partial settlement of a loss or
claim under a specific coverage, that contains language which releases the
insurer or its insured from its total liability.
Again considering the second Dunn factor, the elements of these claims occurred
by May 2013. See Dunn, 689 S.E.2d at 265. As section 33-11-4(9)’s title–“[u]nfair claim
22

settlement practices”–reveals, subsections (a), (b), and (d) prohibit certain claims handling
practices. Cumulative of the violations listed in § 33-11-4(9), Rule § 114-14-4 also
addresses claim handling. Am. Safety Indem. Co. v. Stollings Trucking Co., Civil Action
No. 204-0752, 2007 WL 2220589, at *8 (S.D.W. Va. July 30, 2007) (stating that West
Virginia Code of State Rules are cumulative of § 33-11-4(9) violations and therefore help
inform the scope of such violations). Because these WVUTPA claims all relate to AMLI’s
handling of the Plaintiff’s claim, their elements occurred, at the earliest, in May 2013 when
the Plaintiff’s counsel submitted his claim to AMLI. See Compl. ¶¶ 68-69.
Having found that the statute of limitations began to run in May 2013, the Court need
not consider whether the discovery rule, fraudulent concealment, or another tolling doctrine
applies because the Plaintiff initiated this case less than one year after he submitted his
claim to AMLI. Accordingly, the WVUTPA claim based on violations of
§ 33-11-4(9) and Rule § 114-14-4 is timely.
ii. Cognizable Injury
AMLI also contends that the Plaintiff has not shown that the WVUPTA violations
injured him because he had no expectation of insurance coverage after canceling his
coverage in 2011, a third party paid the policy premiums, and he did not incur expenses
that he expected the policy covered.
The Supreme Court of Appeals of West Virginia has consistently found that
WVUTPA actions sound in tort rather than contract. Kenney v. Indep. Order of Foresters,
744 F.3d 901, 903 (4th Cir. 2014); see also McCormick v. Allstate Ins. Co., 475 S.E.2d 507,
519 (W. Va. 1996) (explaining that a WVUTPA claim is distinct from a breach of contract
claim).

As such, West Virginia recognizes WVUTPA claims based solely on unfair
23

settlement practices; that is, the resolution of the claim and terms of the policy have no
bearing on a WVUTPA claim’s viability. Kenney, 744 F.3d at 906, 911 (explaining that
plaintiff could predicate her claim on the bad-faith handling of the claim itself) (citing Wilt
, 506 S.E.2d at 609).
Here, the Plaintiff has adequately pleaded an injury. As the Fourth Circuit explained
in Kenney, the mishandling of a claim alone gives rise to a WVUTPA claim. Id. at 906.
That is precisely what the Plaintiff alleges–that he submitted a claim to AMLI and AMLI
mishandled it. The Plaintiff’s expectations of coverage and the individual who paid the
premiums of the policy are of no consequence to whether AMLI violated § 33-11-4(9).
Accordingly, the Court rejects AMLI’s argument that the Plaintiff lacks the injury necessary
to bring a § 33-11-4(9) claim.
iii. General Business Practice
AMLI finally argues that the § 33-11-4(9) claims fail because the Plaintiff has not
plausibly shown that the WVUTPA violations evidence a general business practice.
To establish a cause of action under § 33-11-4(9), the Plaintiff “must demonstrate
that the insurer (1) violated the WVUTPA in the handling of the claimant's claim and (2) that
the insurer committed violations of the WVUTPA with such frequency as to indicate a
general business practice.” Holloman v. Nationwide Mut. Ins. Co., 617 S.E.2d 816, 823 (W.
Va. 2005). The “general business practice” must have existed “at the time the claim at
issue was handled.” Id. at 823. ”More than a single isolated violation of [§] 33-11-4(9),
must be shown in order to meet the statutory requirement of an indication of ‘a general
business practice’ . . . .” Syl. Pt. 3, Dodrill v. Nationwide Mut. Ins. Co., 491 S.E.2d 1, 3 (W.
Va. 1996) (citation omitted). The Supreme Court of Appeals of West Virginia explained
24

how a single insurance claim can satisfy this requirement in Syllabus Point 4 of Dodrill:
To maintain a private action based upon alleged violations of . . .
§ 33–11–4(9) in the settlement of a single insurance claim, the evidence
should establish that the conduct in question constitutes more than a single
violation of . . . § 33–11–4(9), that the violations arise from separate, discrete
acts or omissions in the claim settlement, and that they arise from a habit,
custom, usage, or business policy of the insurer, so that, viewing the conduct
as a whole, the finder of fact is able to conclude that the practice or practices
are sufficiently pervasive or sufficiently sanctioned by the insurance company
that the conduct can be considered a “general business practice” and can be
distinguished by fair minds from an isolated event.
Additionally, the plaintiff can obtain “[p]roof of other violations by the same insurance
company to establish the frequency issue . . . from other claimants and attorneys who have
dealt with such company and its claims agents, or from any person who is familiar with the
company's general business practice in regard to claim settlement.” Jenkins, 280 S.E.2d
at 260.
Here, the complaint supports the general business practice element with enough
facts. It alleges that, after receiving the Plaintiff’s bills and records in May 2013, AMLI
never contacted the Plaintiff concerning his claim. This omission tends to show a violation
of subsections (b) and (d). Dodrill instructs that this is insufficient to establish a general
business practice as violations in a single claim must arise from discrete acts. Syl. Pt. 4,
Dodrill, 491 S.E.2d at 3. Paragraph 22 of the complaint, however, alleges numerous facts
showing that AMLI violated § 33-11-4(9) when handling other claims. For example, it states
that the Defendants “singl[ed] out and misus[ed] billing and diagnosis code information to
mis-classify claims as either excluded or subject to significant payment limitations under
the policy” and that the Defendants delayed responding “to claims and policyholder calls
for weeks.” Compl. ¶ 22. Taking together the allegations concerning the handling of
25

Plaintiff’s claim and other policy holders’ claims, the Plaintiff has plausibly pleaded that
AMLI violated 33-11-4(9) as a general business practice.
AMLI also contends that the Plaintiff has not specified which violations of § 33-114(9) are attributed to it. The complaint, however, implicates AMLI in all of the alleged
claims handling violations as it alleges NBLA, AMLI, and John Doe 1 worked together to
deny, underpay, or delay payment of claims brought under the AMLI policy. See Compl.
¶¶ 9, 11-13, 20-21.
Having rejected AMLI’s arguments for dismissal of the WVUPTA claim based on
§ 33-11-4(9), the Court denies AMLI’s motion as to that claim.
b. Bad Faith and Breach of Contract
Next, AMLI argues that the bad faith and breach of contract claim fails because the
Plaintiff has not sufficiently pleaded that AMLI breached its obligations under the insurance
policy. The Plaintiff counters that he has done so because he alleges that AMLI did not
investigate his claim or pay any benefits due under the policy.
Initially, to the extent that the Plaintiff seeks to bring a separate claim based on
breach of a duty of good faith and fair dealing, West Virginia does not recognize a
standalone cause of action for good faith. See Stand Energy Corp. v. Columbia Gas
Transmission Corp., 373 F. Supp. 2d 631, 644 (S.D.W. Va. 2005), cited with approval in,
Highmark W. Va., Inc. v. Jamie, 655 S.E.2d 509, 514 (W. Va. 2007). Rather, the good faith
claim is subsumed in the breach of contract claim. Id. Therefore, the Court will consider
whether the Plaintiff has stated a claim for breach of contract and dismiss any claim based
on breach of a duty of good faith and fair dealing.

26

To state a breach of contract claim, a complaint must allege “‘the breach on which
the plaintiffs found their action . . . [and] the facts and circumstances which entitle them to
damages.’” Exec. Risk Indem., Inc. v. Charleston Area Med. Ctr., Inc., 681 F. Supp. 2d
694, 714 (S.D.W. Va. 2009) (quoting White v. Romans, 3 S.E. 14, 16 (W. Va. 1887)). It is
well-established that this claim has the following elements: (1) “the existence of a valid,
enforceable contract;” (2) “that the plaintiff has performed under the contract;” (3) “that the
defendant has breached or violated its duties or obligations under the contract; and” (4)
“that the plaintiff has been injured as a result.” Id. (citing 23 Williston on Contracts § 63:1
(Richard A. Lord, ed. 4th ed. West 2009)); see also Harper v. Consol. Bus. Lines, 185 S.E.
185, 225-26 (W. Va. 1936) (finding complaint stated breach of contract claim where it
alleged existence of a contract, satisfaction of conditions precedent, conduct constituting
breach, and damages).
Here, the Plaintiff has not stated sufficient facts showing that AMLI breached its
obligations under the policy. The complaint alleges that, from February 23, 2012 until April
11, 2012, the Plaintiff was hospitalized for an allergic reaction and MRSA, leading to
$60,000 in medical bills. It does not, however, allege any details concerning the expenses
the Plaintiff submitted to AMLI. Rather, the complaint simply states that “AMLI was
presented with Plaintiff’s insurance claim.” Compl. ¶ 114. The remainder of the complaint
does not reveal more information about the claim. For example, in the facts section, the
complaint states only that the Plaintiff’s counsel gave “AMLI numerous bills and records
and requested reimbursement for all charges.” Compl. ¶ 69. More facts concerning the
expenses claimed are needed to discern which, if any, provision of the policy covered those
expenses. Even if the Plaintiff had provided more facts concerning the claimed expenses,
27

AMLI’s obligations under the policy that pertain to his claim are unclear because the
complaint does not allege which provisions of the policy cover his expenses. The absence
of more information concerning the expenses claimed and the policy provisions that apply
to those expenses is fatal because AMLI did not breach the policy if it did not cover a claim
that the policy did not cover. In short, there is no plausible basis for finding that AMLI
breached the policy without facts to discern the policy obligations at issue and the
expenses alleged to trigger those obligations. The Plaintiff’s claims simply may not have
been payable under the policy. Accordingly, because the Plaintiff has not sufficiently
alleged which policy provisions were breached and the nature of the claim, the complaint
fails to state a plausible breach of contract claim. Koontz v. Wells Fargo, N.A., Civil Action
No. 2:10-CV-00864, 2011 WL 1297519, at *7 (S.D.W. Va. Mar. 31, 2011) (stating that only
the basis of a breach of contract claim “relate[d] to a specific contractual provision” could
support the claim); see also Cincinnati Ins. Co. v. Cost Co., Civil Action No. 5:10CV7, 2010
WL 1902995, at *3 (N.D.W. Va. May 11, 2010) (dismissing breach of contract claim for
failure to state a claim where plaintiff neither alleged which provisions were breached nor
produced a contract because “the plaintiff's claims as to any duties and obligations [were]
speculative”). The Court therefore must dismiss this claim.
c. Fraud and Unconscionability
AMLI moved for judgment concerning the fraud and unconscionability claims. The
Court will deny this portion of the motion as moot because the Plaintiff stated in his
response that he is withdrawing these claims as to AMLI.

28

4. Motion for Leave to Amend Complaint
In his responses to the Defendants’ motions, the Plaintiff states that, if the Court is
“inclined” to dismiss any portion of his complaint, he would request the opportunity to
amend his complaint. He has not filed a proposed amended complaint or otherwise
indicated how he would amend his complaint.
A “court should freely give leave [to amend] when justice so requires.” Fed. R. Civ.
P. 15(a)(2). “[L]eave to amend a pleading should be denied only when the amendment
would be prejudicial to the opposing party, there has been bad faith on the part of the
moving party, or the amendment would be futile.” Johnson v. Oroweat Foods Co., 785
F.2d 503, 509 (4th Cir.1986). However, “the district court must be able to determine
whether ‘justice so requires,’ and in order to do this, the court must have before it the
substance of the proposed amendment.” Roskam Baking Co. v. Lanham Mach. Co., 288
F.3d 895, 906 (6th Cir. 2002) (affirming denial of motion for leave to amend complaint
where plaintiff failed to supply proposed amended complaint or indicate how the complaint
would be amended); see also Swarey, 2012 WL 4208057, at *14. Local Rule of Civil
Procedure 15.01 reflects the importance of having the proposed amendment available for
review as it requires that a plaintiff support a motion to amend with “a signed copy of the
proposed amended pleading.”
In a case similar to the one at hand, the court in Swarey denied an “unsupported,
cursory request for leave to amend” a civil RICO complaint to meet Rule 9(b)’s particularity
standard because the court did not have enough information to assess the amendment for
futility. Id. The Swarey plaintiffs requested, in one sentence in their opposition to the
defendants’ motions to dismiss, that the court allow them to amend their complaint if the
29

court granted the defendants’ motions. Id. They did not submit a proposed amended
complaint or state the allegations that they sought to add to their complaint. Id. At most,
the plaintiffs indicated that they sought to plead the RICO predicate acts of mail, bank, and
wire fraud with particularity. Id. In denying the plaintiffs’ request, the court explained that
the plaintiffs “fail[ed] to provide a sufficient basis for determining whether an amended
complaint would be futile, as it [was] not clear that [the p]laintiffs would, or could, offer any
new allegations to alter the conclusion that the purported scheme” met the continuity
element of a RICO claim. Id.
Here, like in Swarey, the Plaintiff has not provided the Court with a proposed
amended complaint or stated what allegations he seeks to add to his complaint. See id.
His failure to comply with Local Rule 15.01 alone is a basis for denying his request to
amend. Brunner v. State Farm Fire & Cas. Co., Civil Action No. 5:11CV40, 2012 WL
2358952, at *3 (N.D.W. Va. June 20, 2012) (denying motion to amend complaint for failure
to comply with Local Rule 15.01). Even so, the Court cannot assess the futility of the
amendment because the Plaintiff has not even stated which claims he seeks to amend.
The Plaintiff’s request therefore is even more “unsupported” and “cursory” than that made
in Swarey as the Plaintiff has not directed the Court to even one claim that he seeks to
supplement. Accordingly, the Court denies the Plaintiff’s request to amend his complaint.
IV. CONCLUSION
For the foregoing reasons, the Court ORDERS:
1.

The Court GRANTS NBLA’s Motion to Dismiss the RICO claims;

2.

The Court GRANTS NBLA leave to file a Rule 12(b)(2) motion to dismiss

30

concerning whether this Court can exercise personal jurisdiction over it
without the RICO claims and ORDERS that NBLA must file a Rule 12(b)(2)
motion to dismiss by September 18, 2014.
3.

The Court DENIES WITHOUT PREJUDICE the remainder of NBLA’s Rule
12(b)(6) Motion to Dismiss and GRANTS NBLA leave to refile the motion if
the Court finds that it has personal jurisdiction over NBLA;

4.

The Court GRANTS IN PART AMLI’s Motion for Judgment on the Pleadings
as follows:
a.

The Court GRANTS the motion as to the RICO and Bad Faith and
Breach of Contract claims;

b.

The Court GRANTS the motion as to the § 33-11-4(1)(a), (1)(e), and
(2) WVUPTA claims and DENIES the motion as to the
§ 33–11–4(9) and Rule § 114-14-4 WVUPTA claims; and

c.

The Court DENIES AS MOOT the motion as to the fraud and
unconscionability claims.

5.

The Court DENIES the Plaintiff’s Motion to Amend his complaint.

It is so ORDERED.
The Clerk is directed to transmit copies of this Order to counsel of record herein.
DATED: August 19, 2014

31